Pr.Commissioner Of Income Tax Ii vs. M/S Padma Homes Pvt.Ltd.

ITA/50/2016HC Madhya Pradesh31 October 2019Bench: HON'BLE SHRI JUSTICE S.C.SHARMA3 pages

For Petitioner: Veena Mandlik

AI SummaryWithdrawn

What did the High Court hold?

The High Court allowed the prayer for withdrawal of the appeals. The Court noted that the appeals were filed under Section 260A of the Income Tax Act, 1961, and that the Central Board of Direct Taxes (CBDT) had issued circulars specifying monetary limits for filing appeals. The appellant's counsel stated that the present appeals were covered under these circulars and requested withdrawal. The Court granted this request, dismissing the appeals as withdrawn. However, the Court expressly left the question of law open, meaning the underlying legal issue was not decided on its merits. The operative direction was the dismissal of the appeals as withdrawn.

What were the facts?

The appeals were filed by the Principal Commissioner of Income Tax, Indore, against orders passed by the Income Tax Appellate Tribunal. The appeals involved multiple assessees: M/s. Kalani Brothers Indore Pvt Ltd., M/s. Padma Homes Pvt Ltd., and Omprakash Dhanwani. The appeals were filed under Section 260A of the Income Tax Act, 1961. The Central Board of Direct Taxes (CBDT) had issued circulars (No. 3/2018, revised on 20/08/2018, and further circulars on 08/08/2019 and 06/09/2019) specifying monetary limits for filing appeals before High Courts and the Supreme Court. The appellant's counsel submitted that the present appeals were covered under these circulars and prayed for withdrawal.

What were the issues?

1. Whether the present appeals, filed by the Revenue, are maintainable in light of the monetary limits prescribed by CBDT Circular No. 3/2018 and its subsequent revisions, and if they fall under any exceptions allowing contestation on merits. Assessee's Contention: The assessee did not present any arguments as the appeal was withdrawn by the Revenue. The judgment does not record any specific arguments from the assessees. Revenue's Contention: The learned counsel for the appellant (Revenue) submitted that the present appeals are covered under the circulars issued by the Department and prayed for withdrawal of the present appeals. The Revenue relied on the CBDT circulars regarding monetary limits for filing appeals and exceptions thereto, implicitly arguing that the appeals either met the criteria for withdrawal or were not to be contested on merits.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

--- 1 --- HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE D.B.: HON'BLE MR. S. C. SHARMA AND HON'BLE MR. SHAILENDRA SHUKLA, JJ INCOME TAX APPEAL No. 39 / 2016 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. M/S. KALANI BROTHERS INDORE PVT LTD. INCOME TAX APPEAL No. 49 / 2016 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. M/S. PADMA HOMES PVT LTD. INCOME TAX APPEAL No. 50 / 2016 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. M/S. PADMA HOMES PVT LTD. INCOME TAX APPEAL No. 111 / 2016 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. OMPRAKASH DHANWANI INCOME TAX APPEAL No. 112 / 2016 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. OMPRAKASH DHANWANI * * * * * O R D E R (31/10/2019) PER : S. C. SHARMA, J :- The present appeal has been filed u/S. 260A of the Income Tax Act 1961 by the Commissioner of Income Tax Indore against the order passed by the Income Tax Appellate Tribunal. The Central Board of Direct Taxes has issued a circular No. 3/2018 fixing the monetary limit for filing of appeals before the High Courts and before the Supreme Court. However, certain appeals are to be --- 2 --- decided on merits. Paragraph 10 of the Circular dated 11/07/2018 reads as under: Para 10 of the Circular dated 11/7/2018 reads as under : 10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect : (a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or (d) Where the addition relates to undisclosed foreign assets / bank accounts. That the circular no. 3/2018 was further revised by the circular dated 20/08/2018 and paragraph 10 was amended as under : 3. Para 10 of the said Circular provides that adverse judgments relating to the issues enumerated in the said para should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 thereof or there is no tax effect. Para 10 of the Circular No.3 of 2018 dated 11/7/2018 is hereby amended as under: 10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect : (a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or (d) Where the addition relates to undisclosed foreign income / undisclosed foreign assets (including financial assets) / undisclosed foreign bank account. (e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI / ED / DRI / SFIO / Directorate General of GST Intelligence (DGGI). (f) Cases where prosecution has been filed by the Department and is pending in the Court. Thereafter another circular was issued on 08/08/2019 and the monetary limit was enhanced to Rs. 1.00 crore in respect of High Court. A further clarificatory circular was issued on 6th September, 2019 and the Department has been permitted, irrespective of valuation, to file an appeal on merits in cases involved in organized --- 3 --- tax evasion activity (Circular dated 6th September, 2019). The present appeal is covered under the circular issued by the Department and the learned counsel for the appellant prays for withdrawal of the present appeal. The prayer is allowed. The appeal is dismissed as withdrawn. However, the question of law is left open. (S. C. SHARMA) J U D G E (SHAILENDRA SHUKLA) J U D G E KR Digitally signed by Kamal Rathor Date: 2019.11.04 15:20:30 +05'30'

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